Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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  1. The income statement of Tavis Corporation and selected additional data are presented below:

Tavis Corporation

Income Statement

for the Year Ended December 31, 2020

                                                                            

Net sales                                                  $220,000

Cost of goods sold                                  __109,000

Gross profit                                                111,000

Selling and general expenses                       _98,000

Income from operations                                13,000

Interest expense                                          __2,500

Income before income tax                             10,500

Income tax expense                                    __3,000

Net income                                                 $ 7,500

 

Additional data:

Total assets                                              $214,000

Common stockholders’ equity                   $116,000

Preferred dividends                                   $    3,000

Required:

Calculate the following ratios for the current year:

  1. return on sales
  2. return on assets
  3. return on equity
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